Legal Services

• Topic 01

  The SRA Regulatory Framework

  54 questions
• Topic 02

  SRA Principles

  45 questions
• Topic 03

  SRA Code of Conduct

  54 questions
• Topic 04

  Confidentiality and Disclosure

  45 questions
• Topic 05

  Conflicts of Interest

  45 questions
• Topic 06

  Duties to the Court and Third Parties

  45 questions
• Topic 07

  Client Money and Accounts

  45 questions
• Topic 08

  Money Laundering

  54 questions
• Topic 09

  Financial Services Regulation

  45 questions
• Topic 10

  Funding of Legal Services

  45 questions

A few questions from this unit, with the answer and a full explanation. The complete bank is available when you start practising.

1. A client invested £100,000 through a solicitor's firm that was carrying on a regulated activity without authorisation or exemption. The investment is now worth £60,000. The client seeks to recover their money under section 26 FSMA 2000. Which of the following best describes the client's entitlement?

   • A
     The client is entitled to recover only the current value of the investment (£60,000)
   • B
     The client is entitled to recover the difference between the amount paid and the current value (£40,000) only
   • C
     The client is entitled to recover the £100,000 originally paid but cannot claim any additional compensation
   • D
     The client is entitled to recover the £100,000 originally paid plus compensation for any additional loss sustained as a result of parting with the money
     Correct answer
   Explanation

   Under section 26 FSMA 2000, the agreement is unenforceable against the client. Section 26(2) provides that the client is entitled to recover any money paid or property transferred under the agreement, plus compensation for any loss sustained as a result of having parted with it. This means the client can recover the full £100,000 originally invested (not just the current value), plus any additional consequential losses. The remedy does not depend on dishonesty -- it applies whenever the general prohibition has been breached. This is a restitutionary remedy designed to place the client back in the position they would have been in had the unauthorised activity not occurred.

2. A client is arrested on suspicion of a minor summary offence and taken to a police station. The custody sergeant informs the client of their right to legal advice. The client exercises this right. Which of the following best explains why police station advice is not means-tested?

   • A
     Police station advice is not means-tested because LASPO specifically exempted it to encourage guilty pleas at the earliest opportunity
   • B
     Police station advice is not means-tested because the Law Society funds it through solicitors' practising certificate fees
   • C
     Police station advice is not means-tested because the right to legal advice in custody is considered a fundamental right under Article 6 of the ECHR and domestic law -- applying a means test would create barriers to access at a critical point when the individual's liberty is at stake
     Correct answer
   • D
     Police station advice is not means-tested because it is only available for the first 30 minutes and the cost is negligible
   Explanation

   The right to free legal advice at the police station without a means test reflects the fundamental importance of access to legal advice when a person's liberty is at stake. The right to legal advice in custody is protected by section 58 of the Police and Criminal Evidence Act 1984 (PACE) and supported by Article 6 of the European Convention on Human Rights (the right to a fair trial). Applying a means test at the police station would create practical and principled barriers -- individuals in custody may not have access to their financial information, and the immediate availability of advice is essential to protect against unfair treatment. The cost is funded through the legal aid budget administered by the Legal Aid Agency, not by the police or the Law Society.

3. A solicitor is drafting a statement of case. The client provides instructions that include a claim the solicitor considers may be arguable but suspects is based on exaggerated facts. The solicitor has not been able to verify the facts independently. Which of the following best describes the solicitor's obligations?

   • A
     The solicitor must refuse to include the claim because any suspicion of exaggeration prevents inclusion
   • B
     The solicitor should include the claim but add a note to the court that the facts have not been verified
   • C
     The solicitor can include the claim if it is properly arguable on the facts as instructed by the client, provided the solicitor does not know the facts to be false; the solicitor should note the need for further verification
     Correct answer
   • D
     The solicitor should include the claim and let the court determine whether the facts are accurate
   Explanation

   Under paragraph 2.4, a solicitor must only put forward assertions that are properly arguable. The solicitor is entitled to draft the statement of case based on the client's instructions, provided the claim is properly arguable and the solicitor does not know the facts to be false. Suspicion alone does not prevent inclusion, but the solicitor should seek further verification where possible. If the solicitor subsequently discovers the facts are false, they must take appropriate action.